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DECREE No

DECREE No. 40/1998/ND-CP OF JUNE 10, 1998 ON THE SHIPPING BUSINESS BY COMPANIES AND PRIVATE ENTERPRISES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Vietnam Maritime Code of June 30, 1990;

Pursuant to the Law on Companies of December 21, 1990 and the Law Amending and Supplementing a Number of Articles of the Law on Companies of June 22, 1994;

Pursuant to the Law on Private Enterprises of December 21, 1990 and the Law Amending and Supplementing a Number of Articles of the Law on Private Enterprises of June 22, 1994;

At the proposal of the Minister of Communications and Transport,

DECREES:

Articles 1.- This Decree stipulates the conditions and procedures for granting shipping business permits to companies and private enterprises and the conditions and procedures for granting permits for shipping activities on maritime routes to Vietnamese sea-going ships under Vietnamese private ownership.

Article 2.- Vietnamese sea-going ships under Vietnamese private ownership provided for in this Decree, hereafter referred to as "private sea-going ships" for short, are sea-going ships owned by companies or private enterprises which have been established under the Law on Companies or the Law on Private Enterprises and registered in the "national sea-going ship registry".

Article 3.- Private-sea-going ships that satisfy all the conditions provided for in this Decree, other relevant provisions of Vietnamese laws and the provisions of international agreements which Vietnam has signed or acceded to, may be granted permits to conduct shipping activities on maritime routes.

Article 4.- Maritime routes mentioned in this Decree include domestic maritime routes and international maritime routes:

1. A domestic maritime route is a maritime route that links a Vietnamese sea port or a inland waterway port with another Vietnamese seaport or vice versa.

2. An international maritime route is a maritime route that links a Vietnamese seaport with a foreign seaport, which is classified as follows:

a/ A coastal international maritime route is a maritime route that links a Vietnamese seaport with a seaport of the province of Guanxi, China or to a seaport of Cambodia.

b/ A near international maritime route is a maritime route that links a Vietnamese seaport with a seaport of a South East Asian or South North Asian country, other than the seaports provided for in Point 2.a , Clause 2 of this Article.

c/ An trans-ocean international maritime route is a maritime route that links a Vietnamese seaport with a seaport of any country in the world, other than the seaports provided for in Points 2.a and 2.b, Clause 2 of this Article.

Article 5.- Companies and private enterprises shall be permitted to conduct shipping business on domestic maritime routes if they satisfy all the following conditions:

1. Satisfying all the conditions prescribed by the Law on Companies or the Law on Private Enterprises;

2. Having the legal capital of at least two billion Vietnam dong;

3. Their business activity managerial and executive staff must meet the professional requirements under the guidance of the Ministry of Communications and Transport, who have at least graduated from an intermediate maritime school and worked in the sea-shipping industry for three or more years;

4. Their chief accountants must meet the professional requirements prescribed by the Ministry of Finance;

5. The People's Committee of the province or city directly under the Central Government (hereafter collectively referred to as the provincial-level People's Committee), where the concerned company or private enterprise has its head office, request in writing the Ministry of Communications and Transport to approve the granting of a shipping business permit.

Article 6.- Companies and private enterprises shall be permitted to conduct shipping business on international maritime routes if they satisfy all the following conditions:

1. Satisfying all the conditions prescribed by the Law on Companies or the Law on Private Enterprises;

2. Having the legal capital of at least five billion Vietnam dong with regard to coastal international maritime routes, 10 billion Vietnam dong with regard to near international maritime routes or 15 billion Vietnam dong with regard to trans-ocean international maritime routes;

3. Their business activity managerial and executive staff must meet the professional requirements under the guidance of the Ministry of Communications and Transport, who have at least graduated from an intermediate maritime school with regard to coastal international maritime routes, or a maritime university with regard to near international maritime routes and trans-ocean international maritime routes, have worked in the maritime shipping industry for five or more years, and acquired an English-language level needed for shipping activities on international maritime routes;

4. Their chief accountants must meet the professional requirements prescribed by the Ministry of Finance and acquired an English-language degree needed for shipping business activities on international maritime routes;

5. The provincial-level People's Committee of the place where the concerned company or private enterprise has its head office, request in writing the Ministry of Communications and Transport to approve the granting of a shipping business permit.

Article 7.- The Prime Minister shall authorize the Minister of Communications and Transport to consider and decide the granting of permits to companies and private enterprises conducting shipping business on international maritime routes.

Article 8.- Shipping enterprises shall be established according to the following order:

1. The provincial-level People's Committees shall receive dossiers of application for conducting shipping business in accordance with the provisions of law;

2. Within seven days from the date of receipt of the proper and complete dossiers, the provincial-level People's Committees shall send written documents together with the applicants' dossiers to the Ministry of Communications and Transport;

3. Such a dossier must include the copies of all academic diplomas and certificates as stipulated in Article 5 or Article 6 of this Decree;

4. Within 10 (ten) days from the date of receipt of the proper dossiers, the Ministry of Communications and Transport shall reply in writing whether to approve or disapprove it so that the provincial-level People's Committees decide the establishment of the enterprises. In case of disapproval, the reason(s) therefor must be clearly stated;

5. After receiving the written approval of the Ministry of Communications and Transport the provincial-level People's Committees shall decide to grant permits to establish companies or private enterprises. Such companies or private enterprises shall then proceed with legal procedures in accordance with the provisions of law.

Article 9.- If companies or private enterprises which have been permitted to conduct shipping business on domestic maritime routes wish to also conduct shipping business on international maritime routes they shall have to both satisfy the conditions specified in Article 6 and Article 10 of this Decree and obtain a competent financial agency's written certification of their fulfillment of all the financial obligations in the preceding fiscal year.

Article 10.- Private sea-going ships shall be granted "maritime operation permits" for operating on maritime routes if all the following conditions are met:

1. The ship owners are enterprises permitted to conduct shipping business in accordance with the provisions of this Decree;

2. The ships satisfy all the technical safety conditions for operating on maritime routes and have been granted certificates by the Vietnam Shipping Registry or other shipping registries authorized by the Vietnam Shipping Registry in accordance with the provisions of Vietnamese laws and international agreements which Vietnam has signed or acceded to;

3. The ships have contracts for insurance of the ship owners' civil liabilities.

4. Their crew must be fully arranged with proper positions and titles prescribed by Vietnamese laws and international agreements which Vietnam has signed or acceded to.

Article 11.- The granting of "maritime operation permits" to private sea-going ships shall be made as follows:

1. The companies or private enterprises shall send to the Vietnam National Maritime Department dossiers which comprise the following papers (the lawful copies as prescribed by law):

a/ Their business registration certificates;

b/ Relevant papers on their registration, crew and insurance of the ship owners' civil liabilities.

2. Within five days from the date of receipt of the complete and proper dossiers, the Vietnam National Maritime Department shall have to grant "maritime operation permits" to the ships according to a form set by the Minister of Communications and Transport. In cases where a private sea-going ship fails to meet all the conditions the Vietnam National Maritime Depart-ment shall, within this time limit, have to reply in writing to the applicant, clearly stating the reasons therefor.

Article 12.-

1. Private sea-going ships with the "maritime operation permits" for operating on coastal international maritime routes shall be permitted to operate on coastal international maritime routes and domestic maritime routes;

2. Private sea-going ships with the "maritime operation permits" for operating on near international maritime routes shall be permitted to conduct shipping activities on near international maritime routes, coastal international maritime routes and domestic maritime routes;

3. Private sea-going ships with the "maritime operation permits" for operating on trans-ocean international maritime routes shall be permitted to conduct shipping activities on all maritime routes.

Article 13.- Companies and private enterprises shall be entitled to lodge complaints in accordance with the provisions of law if they are not permitted to conduct shipping business or their ships are not granted "maritime operation permits".

Article 14.- Companies or private enterprises that violate the provisions of Vietnamese law on shipping business, and/or violate the international agreements which Vietnam has signed or acceded to shall, depending on the seriousness of their violations, be handled in accordance with the provisions of law.

Article 15.- Companies, private enterprises or sea-going ships, which are conducting shipping business before the effective date of this Decree shall have to complete all legal procedures prescribed by this Decree within 365 (three hundred sixty five) days from the effective date of this Decree.

Article 16.- This Decree takes effect 15 days after its promulgation. All previous provisions which are contrary to this Decree are hereby annulled.

Article 17.- The Minister of Communications and Transport shall have to guide the implementation of this Decree.

The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the provinces and cities directly under the Central Government shall have to implement this Decree.

On behalf of the Government

Prime Minister

PHAN VAN KHAI